The idea that New Zealand has become one of the most unequal societies in the developed world is just not supported by the data. It is a belief that is in some danger of hardening into received wisdom.

While the report debunks the notion that New Zealand is conspicuous among developed countries for inequality, it is far from providing a defence of the status quo or grounds for complacency.

In terms of the top vs the bottom 10%:

Another way of measuring income inequality is to look at the income of the top decile or 10 per cent of households (when ranked by income) and compare it with the bottom decile’s.

The average over the past four household economic surveys is that the top decile have received 8.5 times the income of the bottom one, after tax and transfers.

That puts us in the middle of the OECD rankings, and lower than Australia and Canada (8.9 times), Britain (10 times) and the United States (16 times).

Also:

Between the 2008/09 HES and the 2011/12 survey market income for New Zealand households fell 2.6 per cent in real terms, similar to the declines seen in the US, Britain and Australia.

But the net change in median disposable income (after tax and transfers) was a rise of 0.5 per cent over that three-year period as tax cuts and increased New Zealand superannuation compensated for the decline in market income.

Called taking the edges off the recession.

“For many OECD countries, lower income households tended to lose more, or gain less, than high income families,” the report says.

For New Zealand, however, there was a small gain for bottom-decile households of 1 to 3 per cent and a net fall, of around 8 per cent, for the top decile.

Please remember this data when people go on about how the rich have done best under National. Simply not true.

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This entry was posted on Friday, July 19th, 2013 at 9:00 am and is filed under NZ Politics.
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Comparing the top 10% to the bottom 10% is utterly meaningless. It is the shape of the distribution that matters. It would be more of a concern if there was a large disparity between say the bottom 10% and the next 10% after that. 10% (or 1% for that matter) isn’t a large enough proportion to bid up prices of everyday consumables hence do little to affect price levels and affordability. People seem to forget how pricing and money work.

You will always have people at the bottom, but 90% of those people will eventually move further on up.

Students are the best example of that.

Individual tax returns are the single best indicators of debunking the myth of ‘disparity’.

The sooner that the Tax Office shows that an individual’s income increases over time, then the sooner we can move on from the left’s pathetic attempt to regain government by demonising employers and other so-called ‘rich pricks’! 😎

We have to reject the premise that inequality is a problem to be solved. Rewarding people according to their ability and effort inevitably leads to inequality. Not doing so is the socialist approach which inevitably leads to mass suffering and you still have inequality as well.

If the government was doing a good job, the absolute standard of living of those at the bottom would increase and the gap between them and the top group would also increase.

“I’m waiting for Labour & the Greens to demand an inquiry into why 50% of kiwi workers earn below the average wage!”

qsf: A few questions for you: There are 10 people. 9/10 people earn $10 per hour. 1 person earns $100 per hour. What is the average wage? What percentage of the people earn less than the average wage? Do you know the difference between “average” and “median”?

dpf: As mentioned above, it would be very interesting to have a look at the distribution within the top 10%. Combined, my wife and I are well within the top 5% of household income, but we are nowhere near the top 1%!

Those on the dole get 52 weeks paid holiday – and they only work 0 hour weeks!
That is blatantly unfair. There’s a fast discrepancy between the free-time rich and the free-time poor. I only have 2 free days that I can go the beach in summer and eat a meal of fish and chips – there are those amongst us who can do this 7 days per week.

Some poor business owners don’t get any days that are completely free, and have much less time to spend with their family and friends. Most of us can’t even sleep in to 10am on a Monday – yet there are free-time rich people who get to do this every day!

It has been said that 90% of the free time in NZ is used by 10% of the population. Well, we are the 90%, and I demand a change.

“Creating wealth, security and financial freedom is often an investor’s ultimate goal. 90% of millionaires get there by investing in real-estate”
New Zealand has strong population growth due to its progressive immigration policy and birth rates. Many parts of the country are experiencing housing shortages translating into strong tenant demand and price growth. This trend is expected to continue with recent population projections by the New Zealand Department of Statistics forecasting up to 64% growth over the next 17 years. Auckland city is predicted to almost double its population in the next 40 years. For property investors, this represents outstanding potential growth in demand and return on investment. New Zealand’s property prices are also relatively undervalued compared to its closest neighbour Australia.http://www.nzps.com/

SWG Report:
The Government’s role
Clearly, there are serious questions to be asked about New Zealand’s economic policy and how we got into this mess. Why was it not better designed and managed, and more focussed, coordinated and strategic? Did the electorate simply get what it voted for, without realising what was really happening, or have New Zealanders not been well served over the years?
Underlining the current difficult situation, the government is spending at an unsustainable level and running large deficits (the opposite of saving). As a result, it is borrowing a hefty $300 million a week. It needs to return the Budget to a surplus of no less than 2% of GDP as soon as possible.
Looking ahead over the next 20 years or so, the government will face increasing costs from the effects of an ageing population. If the government is to keep its borrowing within a sustainable level (as it must) over this period, its options are to: substantially increase tax revenue, reduce government spending, or increase government sector productivity and performance. The first two options are clearly unpalatable. However, modelling shows that if the government can lift its performance and increase productivity by 2% a year for five years and 1% thereafter, there would be no need to raise taxes or cut government services. The SWG strongly recommends this.
On other government policy issues, SWG recommendations include:
– A much more strategic and integrated approach to policy generally.
– Serious consideration of the impact of the level and variability of immigration on national saving, and the impact that this might have on the living standards of New Zealanders. There are indications that our high immigration rate has pushed up government spending, house prices and business borrowing.
– Improving data on household and business saving.http://www.treasury.govt.nz/publications/reviews-consultation/savingsworkinggroup/pdfs/swg-report-jan11.pdf

The left are mostly pro immigration and on the other side you have the powerful, rich, influential property sector.

The so-called gap between the so-called rich and the so-called poor is as nothing compared with the gap between the truth and the crap peddled by Labour and the Greens.

I find it ironic that the lefties bleat and lie about income / wealth inequality: if it wasn’t for such inequality (which is actually about results and not opportunity) there’d be no fuel for the politics of envy that beset the leftist mindset.

1) There was little change in the last three years. Does that actually prove anything of interest? Two very tight data points and there there is no analysis here in terms of significance or trend. Lets look at the last 30, the last 50, and be honest about where our grand economic ideologies are taking us, rather than being drawn into a Nat/Labour tittle tattle side show.

2) As others say, lets look at the top 1%. (you think these policies are working for you? Really?)

3) Finally, as the original analysis itself says, the figures here nothing to be proud of. Chose a future where you revel in your new fridge behind the razor wire of your gated community if you like, but high inequality will have a negative impact on all of us.

People in the upper reaches, those just below the top 10th, have had a decent – $2000 or so – increase in their discretionary cash. They get most of their money from salaries, and those higher salaries have grown despite the tough times. But the top 10th have seen an 8 per cent dip in income, owing to lower returns on their investments, which make up more of their income.

As a final point, it’s also worth remembering that none of this changes the overall picture, which is that in the last 30 years, incomes for those at the top have doubled, while those at the bottom have stagnated. Someone in the lowest 10th of the country has, after housing costs, just $11,500 a year to spend. That figure (adjusted for inflation) in 1982? $11,000.